Rapid7, Inc 10-Q for FY2026 Q1

Rapid7, Inc. (RPD)

10-Q 2026-05-05 For: 2026-03-31

Added on May 05, 2026

About this 10-Q

Rapid7, Inc filed this 10-Q on May 5, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).

Headline figures

Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $209.69M; down 0.3% from $210.25M a year earlier
Net income: $1.13M; down 46.3% from net income of $2.11M a year earlier
Diluted EPS: $0.02; down 33.3% from $0.03 a year earlier

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Delaware						35-2423994
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


120 Causeway Street
Boston,	MA	02114
(Address of principal executive offices)		(Zip Code)


Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	RPD	The Nasdaq Global Market


Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated Filer	☐	Small Reporting Company	☐
Emerging Growth Company	☐



		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive (Loss) Income	3
	Condensed Consolidated Statements of Changes in Stockholders' Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	39
PART II.	OTHER INFORMATION	40
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
	Signatures	42


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934




	March 31, 2026		December 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	343,291	$	246,664
Short-term investments	326,967		228,006
Accounts receivable, net of allowance for credit losses of $2,063 and $2,476 at March 31, 2026 and December 31, 2025, respectively	135,128		167,017
Deferred contract acquisition and fulfillment costs, current portion	47,342		48,370
Prepaid expenses and other current assets	47,617		47,230
Total current assets	900,345		737,287
Long-term investments	—		184,119
Property and equipment, net	30,492		31,990
Operating lease right-of-use assets	44,250		45,485
Deferred contract acquisition and fulfillment costs, non-current portion	65,554		66,978
Goodwill	593,334		575,268
Intangible assets, net	67,567		65,105
Other assets	18,101		20,232
Total assets	$	1,719,643	$	1,726,464
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	12,304	$	11,041
Accrued expenses and other current liabilities	84,407		96,998
Convertible senior notes, current portion, net	597,574		—
Operating lease liabilities, current portion	17,964		16,176
Deferred revenue, current portion	442,260		451,155

Total current liabilities	1,154,509		575,370
Convertible senior notes non-current portion, net	295,666		892,284
Operating lease liabilities, non-current portion	53,987		59,908
Deferred revenue, non-current portion	28,417		29,971
Other long-term liabilities	12,292		14,201
Total liabilities	$	1,544,871	$	1,571,734
Stockholders’ equity:
Preferred stock, $0.01 par value per share; 10,000,000 shares authorized at March 31, 2026 and December 31, 2025; 0 shares issued and outstanding at March 31, 2026 and December 31, 2025	$	—	$	—
Common stock, $0.01 par value per share; 100,000,000 shares authorized at March 31, 2026 and December 31, 2025; 67,342,257 and 66,417,175 shares issued at March 31, 2026 and December 31, 2025, respectively; 66,772,002 and 65,846,920 shares outstanding at March 31, 2026 and December 31, 2025, respectively	667		658
Treasury stock, at cost, 570,255 shares at March 31, 2026 and December 31, 2025	(4,765)		(4,765)
Additional paid-in-capital	1,142,304		1,120,963
Accumulated other comprehensive income (loss)	89		2,527
Accumulated deficit	(963,523)		(964,653)
Total stockholders’ equity	174,772		154,730
Total liabilities and stockholders’ equity	$	1,719,643	$	1,726,464


	Three Months Ended March 31,
	2026		2025
Revenue:
Product subscriptions	$	204,049	$	203,935
Professional services	5,642		6,318
Total revenue	209,691		210,253
Cost of revenue:
Product subscriptions	59,154		54,368
Professional services	5,595		5,112
Total cost of revenue	64,749		59,480
Total gross profit	144,942		150,773
Operating expenses:
Research and development	48,354		47,888
Sales and marketing	78,934		79,400
General and administrative	18,212		23,586


Total operating expenses	145,500		150,874
Loss from operations	(558)		(101)
Other income (expense), net:
Interest income	5,612		5,758
Interest expense	(2,498)		(2,654)
Other (expense) income, net	(726)		1,802
Income before income taxes	1,830		4,805
Provision for income taxes	700		2,700
Net income	$	1,130	$	2,105
Net income per share, basic	$	0.02	$	0.03
Net income per share, diluted	$	0.02	$	0.03
Weighted average common shares outstanding, basic	66,174,341		63,835,945
Weighted average common shares outstanding, diluted	66,904,992		64,224,415


	Common stock			Treasury stock			Additional paid-in-capital		Accumulated other comprehensive loss		Accumulated deficit		Total stockholders’ equity
	Shares	Amount		Shares	Amount
Balance, December 31, 2025	65,847	$	658	571	$	(4,765)	$	1,120,963	$	2,527	$	(964,653)	$	154,730
Stock-based compensation expense	—	—		—	—		18,717		—		—		18,717
Issuance of common stock under employee stock purchase plan	498	5		—	—		2,884		—		—		2,889
Vesting of restricted stock units	462	5		—	—		(5)		—		—		—
Shares withheld for employee taxes	(35)	(1)		—	—		(255)		—		—		(256)

Other comprehensive loss	—	—		—	—		—		(2,438)		—		(2,438)
Net income	—	—		—	—		—		—		1,130		1,130
Balance, March 31, 2026	66,772	$	667	571	$	(4,765)	$	1,142,304	$	89	$	(963,523)	$	174,772


	Next Twelve Months		Thereafter
Product subscriptions	$	552,648	$	274,418
Professional services	13,092		4,454
Total	$	565,740	$	278,872


Consideration:
Cash	$	24,167
Deferred cash consideration	1,348
Fair value of total consideration transferred	$	25,515

Recognized amount of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	821
Accounts receivable	134
Prepaid and other current assets	46
Property and equipment, net	10
Accrued expenses and other current liabilities	(10)
Deferred revenue	(152)
Other long-term liabilities	(600)
Intangible asset	7,200
Total identifiable net assets assumed	$	7,449
Goodwill	18,066
Total purchase price allocation	$	25,515


	As of March 31, 2026
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Description:
U.S government agencies	$	327,013	$	161	$	(207)	$	326,967



Total assets	$	327,013	$	161	$	(207)	$	326,967


	As of December 31, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Description:


U.S government agencies	$	411,424	$	701	$	—	$	412,125

Total assets	$	411,424	$	701	$	—	$	412,125


	As of March 31, 2026
	Level 1		Level 2		Level 3		Total
Description:
Assets:
U.S. government agencies	$	326,967	$	—	$	—	$	326,967

Foreign currency forward contracts designated as cash flow hedges (prepaid expenses and other current assets)	—		626		—		626
Total assets	$	326,967	$	626	$	—	$	327,593
Liabilities:
Contingent consideration (other current liabilities)	—		—		8,947		8,947

Total liabilities	$	—	$	—	$	8,947	$	8,947


	Three Months Ended March 31,
	2026		2025
Beginning balance	$	115,348	$	125,806
Capitalization of contract acquisition and fulfillment costs	11,419		9,273
Amortization of deferred contract acquisition and fulfillment costs	(13,871)		(14,569)
Ending balance	$	112,896	$	120,510




	As of March 31, 2026		As of December 31, 2025
Computer equipment and software	$	23,375	$	23,728
Furniture and fixtures	11,942		11,893
Leasehold improvements	61,456		61,456
Total	96,773		97,077
Less accumulated depreciation	(66,281)		(65,087)
Property and equipment, net	$	30,492	$	31,990


		As of March 31, 2026						As of December 31, 2025
	Weighted Average Estimated Useful Life (years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Intangible assets subject to amortization:
Developed technology	6.3	$	154,055	$	(116,309)	$	37,746	$	146,855	$	(111,886)	$	34,969
Customer relationships	6.0	12,000		(11,976)		24		12,000		(11,906)		94
Trade names	0.0	2,619		(2,619)		—		2,619		(2,619)		—
Total acquired intangible assets		168,674		(130,904)		37,770		161,474		(126,411)		35,063
Internal-use software	3.0	88,031		(58,234)		29,797		83,934		(53,892)		30,042
Total intangible assets		$	256,705	$	(189,138)	$	67,567	$	245,408	$	(180,303)	$	65,105


2026 (for the remaining nine months)	$	22,491
2027	19,345
2028	8,944
2029	4,587
2030	4,443
2031 and thereafter	2,653
Total	$	62,463


	Carrying Amount


Balance at December 31, 2025	$	575,268
Kenzo acquisition	18,066
Balance at March 31, 2026	$	593,334


	2027 Notes			2029 Notes
		Principal		Unamortized debt issuance costs		Total		Principal		Unamortized debt issuance costs		Total
Balance at December 31, 2025		$	600,000	$	(3,044)	$	596,956	$	300,000	$	(4,672)	$	295,328
Amortization of debt issuance costs		—		619		619		—		338		338

Balance at March 31, 2026		$	600,000	$	(2,425)	$	597,575	$	300,000	$	(4,334)	$	295,666


	Capped Calls Entered into in Connection with the Issuance of the 2027 Notes		Capped Calls Entered into in Connection with the Issuance of the 2029 Notes
Initial strike price, subject to certain adjustments	$	103.38	$	64.85
Cap price, subject to certain adjustments	$	159.04	$	97.88
Total premium paid (in thousands)	$	76,020	$	36,570
Expiration dates	January 1, 2027 - March 11, 2027		February 13, 2029 - March 13, 2029


	Shares	Weighted Average Grant Date Fair Value








Unvested balance as of December 31, 2025	3,970,517	$	33.48
Granted	3,084,595	6.43
Vested	(462,447)	50.47
Forfeited	(478,009)	33.93
Unvested balance as of March 31, 2026	6,114,656	$	18.51


	Price Hurdles
	Below $15.00	$15.00		$17.50	$20.00	$25.00	$30.00 or Higher
Plan 1	—%	50	%	75%	100%	125%	150%
Plan 2	—%	—	%	—%	100%	125%	150%


	Grant Date
	Plan 1	Plan 2
Expected term (in years)	3	3
Expected volatility	50.1%	50.1%
Risk-free interest rate	3.85%	3.85%
Expected dividend yield	—%	—%
Fair value per unit	$2.37	$1.81


	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (in thousands)








Outstanding as of December 31, 2025	223,232	$	13.38		$	498


Forfeited/cancelled	(2,000)	12.80
Outstanding as of March 31, 2026	221,232	13.39		0.73	—
Vested and exercisable as of March 31, 2026	221,232	$	13.39	0.73	$	—




	As of March 31, 2026		As of December 31, 2025
United States	$	16,888	$	18,243
Rest of World	13,604		13,747
Total	$	30,492	$	31,990


	Three Months Ended March 31,				Change
	2026		2025		$		%
Revenue:
Product subscriptions	$	204,049	$	203,935	$	114	0.1	%
Professional services	5,642		6,318		(676)		(10.7)	%
Total revenue	$	209,691	$	210,253	$	(562)	(0.3)	%


	As of March 31,
	2026			2025
Annualized recurring revenue (“ARR”)	$	832,130		$	837,220
Year-over-year change	(0.6)		%	3.7		%
Number of customers	11,629			11,685
Year-over-year change	(0.5)		%	1.9		%
ARR per customer	$	71.6		$	71.6
Year-over-year change	—		%	1.7		%


Exhibit Number						Description

3.1						Amended and Restated Certificate of Incorporation of Rapid7, Inc., as of June 3, 2020 (incorporated by reference Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-37496), filed on August 10, 2020).
3.2						Amended and Restated Bylaws of Rapid7, Inc., as of June 3, 2020 (incorporated by reference to Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-37496), filed on August 10, 2020).
10.1+						Amendment No. 2 to the Rapid7, Inc. 2015 Equity Incentive Plan (incorporated by reference to Exhibit 99.1 to the Registrant’s Registration Statement on Form S-8 (File No. 333-294643), filed on March 26, 2026).
10.2						Nomination and Support Agreement, by and between Rapid7, Inc. and JANA Partners Management, LP, dated March 26, 2026 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 001-37496), filed on March 30, 2026).
31.1*						Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*						Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**						Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**						Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH						Inline XBRL Taxonomy Extension Schema Document.
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104						Cover Page Interactive Data file (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101)


*			Filed herewith.
**			This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
+			Indicates management contract of compensatory plan.



	RAPID7, INC.

Date: May 5, 2026	By:	/s/ Corey E. Thomas
		Name: Corey E. Thomas
		Title: Chief Executive Officer

Date: May 5, 2026	By:	/s/ Rafeal E. Brown
		Name: Rafeal E. Brown
		Title: Chief Financial Officer